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The latest figures released by the Bank of England indicate that mortgage approvals have fallen in February, illustrating a slow start to 2010 for the housing market in the UK. The number of mortgages approved for house-buying dropped by a little over 1,000 to just over 47,000 according to the figures. The fall marks the third consecutive monthly drop and comes on the back of a substantial drop in the previous month as the market was hit by the ending of the stamp duty holiday. Also during February building societies saw an increase in savings, with figures from the Building Societies Association showing that savings accounts held at mutual institutions rose by over £800 million in February marking the first such rise for more than a year.

Other surveys and studies within the industries show that the housing market was clearly affected by both the end of the temporary stamp duty holiday and the period of inclement weather. According to figures from the British Bankers Association – as well as the latest BOE figures – add to suggestions that the ‘hangover’ afflicting the housing market is continuing.

The Bank of England figures indicated that the number of mortgage approvals for house purchases dropped below the previous six monthly average which stood at 55,130. The figure was 21% lower that November’s peak in approvals and is the lowest for nine months. Industry analysts have commented that the figures indicate that house prices will continue their erratic trend for corrections over the coming year and that the stalling of mortgage approvals over the last few months has largely signalled a current lull in the housing market. Analysts remain to be convinced as to whether the recent budgetary measures will cause the market to improve.

The budget included measures suspending stamp duty for the next two years for first-time buyers buying properties worth up to £250,000. Measures were also announced to increase stamp duty on houses worth in excess of £1 million-a measure that will come into effect in April 2011.

The figures from the BOE also showed a increasing number of people re-mortgaging in February, and borrowing on credit cards and via personal loans saw the highest increase since November 2008.

The last year has seen an incredible turnaround in the UK’s property market and a full recovery in underway – despite the upcoming challenges to the market throughout 2010, in particular the General Election. The current year has seen a decent start with overall sentiments in the housing market improving. Among the reasons for this is the fact that mortgage lending, although still restricted, is continuing to cheapen according to the new quarterly report from Winkworth. Mot noticeable is the fact that the prime property market is still buoyant, with available properties and the weakness of Sterling continuing to attract a steady influx of foreign buyers looking to monopolize on potentially highly profitable overseas mortgages, with many first-time buyers from other countries even looking toward England for their initial purchases. Dominic Agace, Winkworth’s chief executive, said that he hopes to see more properties coming onto the market during 2010, especially with prices showing signs of recovery, “especially family houses, where there is still a significant shortage”.

The report also indicates that there is still a limited availability of stock, which reflects a return to historic levels, although without strong rising price pressures. The report also shows that corporate rentals are returning gradually, although in general they are still some way below the levels seen in 2007. The report goes on to predict that the rental market is likely to continue to strengthen, having shorter void periods and less upward price pressure.

The one large unknown factor of 2010, however, remains the General Election and its possibility of resulting in a hung parliament, which could well lead to a period of continued uncertainty in the UK property market.

The report concludes, however, that it is too easy to over-estimate the actual impact that the General Election and its possible outcomes might potentially have on both the UK housing market and economy. The report says that there is little indication that the property owning and buying public will alter their behaviour in any way either before or after the country goes to the ballot box. Others, however, remain convinced that, although General Elections don’t normally have too much of an effect on the UK property market, this year’s election is different-particularly with regards to its effects on the mainstream property market because of where we current stand in the housing cycle. As a result of the low turnover currently seen in the property market and the fact that the market is only partially functioning as a result of the world financial slowdown it is likely to be more vulnerable than usual to even the slightest political change.

The Financial Services Authority (FSA) has recently proposed a cap be placed upon maximum loan values being offered against property value in order to prevent price bubbles from occurring and leading to a "loan to bust" scenario in the future that may have an overall detrimental effect upon the UK economy as a whole, not just the real estate sector in particular. This has been of particular interest as of late in regards to commercial mortgages in particular due to their current status of recovering from many previous hardships as well as the housing market as a whole where loan-to-property value ratios have hit as high as 125% in many cases.

While there are a number of proponents for this course of action a number of those at the Council of Mortgage Lenders (CML), including communications manager Bernard Clarke, feel that this would be overall a bad idea as it would limit many prospective buyers from becoming active in the real estate sector and take advantage of the current good mortgage rates offered by many lending institutions. This is particularly important for many first-time buyers looking to become involved somehow and may not have a large amount of disposable income available, thus forcing them to rely upon higher loan-to-value rates in order to secure enough financing to meet their needs.

Over the past few months since the end of the Stamp Duty Holiday the amount granted to consumers by lending agencies has steadily increased, though at the same time overall property sales have decreased at the same time. This imbalance reflects the current trends by lending agencies to grant higher-valued loans for purchases or re-mortgages over the home’s actual value yet whether or not this is a sustainable situation is still yet to be seen as many lenders are becoming more and more cautious recently in granting funds as the fear of defaulting payments is still a major concern in the uncertain economic times. Regardless there are no plans to change the current trend and the Council of Mortgage Lenders is outwardly opposed to any cap being placed on lending practices in order to not stymie any market growth potential from being realized.

According to the latest research conducted by the Building Societies Association, confidence in the UK property market remains brittle as the country enters the final periods before the General Election, and buyers remain largely uncertain as to whether or not now is the best time to buy.

In general, it appears that people largely expect property prices will rise during the next year, although the current political uncertainties are giving rise to concerns that their buying power may be adversely affected.

Some of the latest property surveys carried out by the BSA revealed that people are expecting property prices to increase by 2.2% during the coming year, although only 49% of those questioned believed that now is one of the best times to purchase a home. This figure is some way down on the 58% that responded positively as of December 2009 and it is the first occasion as well that the percentage of those questioned believing that now was a good time to buy has fallen below the 50% mark.

According to Paul Broadhead, Head of Mortgage Policy at the BSA, the figures are largely unsurprising. He believes that potential buyers will hold off in order to ascertain the effects of the ending of the stamp duty period on the property market. He also agreed that the upcoming budget as well as General Election give possible home-buyers “further levels of uncertainty.”

Mr Broadhead added, however, that people still appear to regard property as a decent investment, as they still expect property values should rise over the coming twelve months – particularly good for those seeking to get the best mortgage value possible. He hopes that buyers will return to the market following the election and confidence return with regards to the economic outlook.

Current research seems to suggest that 2010 could potentially be an strong year for many first-time buyers, with roughly 42% of all enquiries to registered mortgage advisers being from people looking to purchase their first property according to the latest reports from many property analyst groups. They believe that, all things considered, 2010 may easily turn out to be considered by many to be the "year of the first-time buyer" with even commercial mortgages getting a boost from the recovering economy, though naturally it is still too early in the year to determine whether or not this case will turn out to be true or not.

The number of repossessions and mortgage cases in arrears throughout the greater Britain area have reported declined substantially over the past few quarters according to many analysts. In the fourth quarter of 2009 alone the number of arrears cases dropped by 9% to 41,000 according to the Financial Services Advisory (FSA). As of right now that puts the most home buyers into a fairly comfortable position, with the lowest drop occurring most noticeably in terms of those home owners facing new possessions (with the tremendous drop of 15% in the last quarter of 2009 alone serving to return the number to a paltry 11,800, the lowest it’s been since mid 2008.

The primary reason behind this according to most experts is the continuation of the low interest rates that provides new, first-time buyers and re-mortgagers to keep in the market and help stimulate home prices with the top mortgage rates available today (as opposed to just a few short years ago.

Should this growth be sustained throughout the year it would mean a substantial boost to the currently shaky UK property market, though at the same time the likelihood of this occurring is slim as the government may be likely to reverse many of those conditions they have put into place in previous years now that the economy is recovering in the new decade. This means that the booming real estate market is significantly strong now, however be additionally careful as always to watch out for any small shift that could signal the end of the current trend and the issuing in of potentially less-than-desirable new legal conditions.

With this in mind many people have taken to the streets to seek out new homes before any other big change is made, thus only further driving up home values and in turn helping to limit the number of cases in arrears even further. This is expected to continue at least through the second quarter of 2010 and is set to be a strong boost to the already fragile (yet recovering) UK economy that was hit particularly hard during the tough economic times that hit the European sector particularly hard overall compared to other parts of the world.

Figures detailed in a newly-released report have indicated that supply is now outstripping demand in the UK property market, marking the first sustained change in the market for two years. The report, produced by the Royal Institution of Chartered Surveyors, indicated that the balance between supply and demand changed to incline towards the supply side for the second month in a row, as the net balance for new instructions continued to outpace buyer interest.

During February 2010 the number of new instructions and new buyer inquiries rebounded following January’s weather-hit drop, and February also saw both net balances return positive values. February also saw the new instructions net balance outstrip the new buyers net balance for the second month in a row. Also in February around 7% more chartered surveyors recorded an initial increase and then drop in new buyer enquiries as compared with January, up from a negative reading of 20%. Also, a balance of around 15% surveyors reported an increase in new instructions in February, as compared to a negative balance of 5% for the previous month.

Added to this, 17% more chartered surveyors in January recorded an increase and then a drop in house prices, a figure down from January’s mark of 31%, and regional surveyors are continuing to record house price rises in the majority of areas despite the fact that net balances are not quite as positive as previously.

The report by the RICS also shows that surveyors working in Yorkshire and Humberside, the North, Wales and the West Midlands are all recording falls in property prices. Despite this, however, the net balance for price expectations remained positive, despite the fact that the very latest figure is the lowest recording since July 2009. Also, the most widely-regarded indicated, the sales-to-stock-ratio has also begun to fall to a lower level which coincides with the property market begin to loosen up a little. According to Jeremy Leaf, an RICS spokesman, the majority of market indicators remain in positive territory and are consistent with future increases in house prices. He did state, however, that any raises in house prices in the future would be likely to ease somewhat, ‘reflecting the fact that new supply entering the market is beginning to outstrip fresh demand.’ In the meantime however the current good mortgage deals offered by many institutions for first-time buyers as well as overseas mortgage options looking to stimulate the market is shifting the current housing situation to a buyer’s rather than a seller’s avenue.

The UK’s grey explosion has definite implications for the UK’s future retirement properties, as well as the residential real estate market in general, a new report has claimed. Retired people from the UK’s most rapidly-expanding demographic, as well as older households will, between now and the year 2026, come to stand for half of all household growth. The numbers come from the 2010 Retirement Housing Report delivered by UK properties consultants, Knight Frank.

The report has highlighted the importance of the need for the construction, development and care industries to become aware of this growing trend, and further pointed out that action in the UK retirement sector has historically been a long way behind thinking and practise in countries such as the US, Australia and New Zealand. Liam Bailey, the head of research at Knight Frank, stated that although retirement villages have long been popular in the UK, there are still few in the UK, which means that there are decent growth prospects for the concepts.

Mr Bailey also said that the growth in popularity of retirement villages ’stems, firstly, from the UK’s ageing population. Also, there is a growing tendency among older people to place an importance of the need for security, as well as opportunities to socialise.’ He also stated that the trend to release equity through downsizing may also result in a great move towards specialised retirement housing. In terms of statistics, the majority of over 65s in the UK (around 89%), live in mainstream housing. Compared to this, only 6% (around 500,000 households) are currently living in retirement housing with only 5% (perhaps 400,000) living in either residential care or nursing care.

Mr Bailey went on to explain that the majority of retired people live as owner occupiers in mainstream housing, whilst most people decide to take up places in retirement homes as a result of bereavement, poor health or the need to be close to family. He went on to identify the great opportunities in the retirement housing market for modern, purpose-built housing-particularly where the retirement village idea is concerned. Housing requirements will continue to grow due to the fact that people over the age of 60 are healthier, more active and are living longer than ever. Also, with many older people continuing to work, such new retirement villages must take such needs into account, as well as more advanced recreational facilities as older people demand more from their golden years. Such retirement villages also provide employment, which can also have a beneficial effect on nearby communities. They may also help stimulate further interest in buy-to-let housing specifically for this purpose and help encourage good mortgage rates on fixed-rate mortgages for key areas – all beneficial to the local economy as a whole.

New research conducted by the user experience design company Foolproof indicates that consumers are still getting a poor deal when it comes to arranging and purchasing a mortgage online, despite the general ubiquity of the internet in most other areas of consumers lives. The recent Online Shopping Survey, conducted by Foolproof, investigated how consumers utilise the Web in order to search for and arrange a mortgage, and it discovered that the number of people wanting to arrange their next mortgage on the Net actually doubled in the two year period between 2007 and early 2010 from 9% to 18%.

Also, with regard to sourcing their next mortgage deals, 84% of people surveyed said that they intended to use the internet to do so, with 8% looking to do so via their mobile phones to get online access to information. Almost half (45%) actually stated that they would then go on to apply for and purchase their mortgage deal online, although it appears that this seeming enthusiasm is not matched by the mortgage industry.

According to the results of Foolproof’s survey the mortgage industry has failed to make any real progress in terms of delivering a simple and effective online experience for potential customers. The founder of Foolproof, Tom Wood, explained that the economic downturn over the past two years has made consumers much more savvy and determined to find better information and deals. In terms of mortgages, he stated that consumers were looking to get a knowledgeable foothold in a changed market along with information related to the availability of various products as well as lending conditions.

He concluded that consumers were being let down and hampered by the mortgage industry’s failure to improve its online content. In conclusion, he said that this made it much too difficult for consumers and potential consumers to obtain the information they needed.

Foolproof’s survey came up with a number of tips for consumers to better utilises the information and tools available online. First, they advise persistence. Remember that the mortgage market has changed dramatically in just the last couple of years, and it is important to stay up to date with regards to all news and changes. There are currently a number of different mortgage websites being run that contain useful, daily updated information about the market. They also recommend being as specific as possible with regards to the kind of mortgage you require, a this will help you to get the information you need that much faster. Use specific search phrases like ‘first-time buyer‘ and ‘four-year fixed-rate mortgages‘ to make your search faster and the results more relevant.

The latest figures released by Britain’s Council of Mortgage Lenders show that property lending in Britain in January was more than one-fifth lower as compared to the same period at the same time last year, with loans also falling to a decade-low figure. Total gross lending dropped to £9.1 billion in January, which represents a 32% drop from the figures seen in December 2009, and the figures were also 21% lower than the figures seen in January last year. At the same time, lending levels fell to their lowest point seen since the beginning of the new century.

According to the Bank of England in a separate release, lenders have also reported that Britain’s extreme weather conditions towards the end period of 2009 and the beginning of 2010 had helped to lower mortgage approval levels in January. The CML stated that the larger than usual fall between the months of December 2009 and January 2009 confirmed that house buying activity was helped during December by a wave of borrowers looking to push their purchase through to beat the end of the stamp duty holiday.

The CML’s figures also revealed that there had been a 56% hike in mortgage advances for those properties affected by the changes to stamp duty in December 2009, a figure far higher than the 11% rise seen by the rest of the property market. The CML has predicted that the early period of 2010 is likely to witness a drop in activity levels due to the fact that more mortgage deals were concluded during the final period of 2009, as well as the uncertainty created by the coming British General Election in the Spring.

Paul Samter, an economist at the Council, added that the rather turgid recovery as well as debt market uncertainties probably meant that the housing market could only really expect a gradual recovery. Due to the fact that the banks will have to refinance around £300 billion of wholesale funding next year it is thought likely that funding costs will rise which could have the effect of curtailing lending to businesses seeking commercial mortgages and households looking for new or re-mortgages.

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